Written by: Vishnu Rajamanickam
Sustainability is the practice of satisfying present needs without endangering future generations. Recent awareness of the detrimental effects of human activity on the environment has elevated the significance of this issue. Sustainability is becoming increasingly significant to individuals, businesses, and governments. Governments are implementing policies to reduce environmental impact, while consumers demand more environmentally friendly products.
Understanding the types of emissions that contribute to a company’s or organization’s overall environmental impact is crucial as they strive to reduce their carbon footprint and meet sustainability objectives.
Scope 1 emissions are direct emissions from sources the company owns or controls, like the combustion of fossil fuels in boilers and vehicles. Indirect emissions from the generation of purchased electricity, heat, or steam are Scope 2 emissions. Scope 3 emissions consist of all other indirect emissions in a company’s value chain, such as the emissions during the production of goods and services bought by the company, employee commute emissions, and waste management.
Understanding the various types of emissions and their origins is essential for businesses to manage and reduce their carbon footprint effectively. This article will examine Scope 3 emissions, their contribution to a company’s overall carbon footprint, and the difficulties associated with measuring and reducing them.
What is Scope 3?
Scope 3 emissions, also known as indirect emissions, contribute significantly to a business’s carbon footprint. According to the Greenhouse Gas Protocol, 80 and 90% of a company’s total emissions are Scope 3. Scope 3 emissions are the indirect emissions a company’s value chain generates, such as purchasing goods and services, employee commuting, and waste. Examples of specific Scope 3 emissions include:
- Upstream emissions from the extraction, production, and transport of raw materials and products
- Downstream emissions from the use, disposal, or recycling of a company’s products
- Emissions from the consumption of purchased electricity, heat, steam, or employee commuting
- Emissions from the disposal of waste and the treatment of wastewater
- Emissions from the use of a company’s products by customers
Broadly, Scope 3 emissions can be divided into three categories:
- value chain
- use of products and services
- and end-of-life product treatment
According to a report by the Carbon Trust, the most significant contributors to Scope 3 emissions are typically those in the value chain category, such as the procurement of goods and services and the transportation of raw materials and products.
Understanding and measuring Scope 3 emissions is crucial for companies seeking to reduce their carbon footprint and meet sustainability goals. The following section will examine the challenges and obstacles associated with measuring and reducing Scope 3 emissions.
Why is Scope 3 a Problem?
Scope 3 emissions pose a significant obstacle for businesses attempting to reduce their carbon footprint and achieve their sustainability objectives.
Controlling and reducing Scope 3 emissions is one of the most significant obstacles to addressing them. Unlike Scope 1 and 2 emissions that are directly produced and regulated by the company, Scope 3 emissions occur within the company’s value chain and can be challenging to track and measure. For instance, emissions from the production of purchased goods and services may occur in multiple locations and be managed by various companies, making it difficult for a single company to implement and enforce emissions reduction measures.
In addition, Scope 3 emissions can be challenging to reduce, as they are frequently associated with consuming a product or service instead of their production. For instance, it is difficult for a car manufacturer to control and reduce emissions from using its customers’ products, such as driving a car.
Scope 3 emissions are typically the most significant source for businesses, especially in the manufacturing, oil, gas, and transportation sectors. Upstream emissions from the extraction, production, and transport of raw materials and products, as well as downstream emissions from the use, disposal, or recycling of a company’s products, account for approximately 70-80% of total emissions in the transportation sector.
Challenges in Measuring Scope 3
Due to a lack of standardization in reporting methods, the complexity of tracking emissions from indirect sources, and limited data availability, measuring and reporting Scope 3 emissions can be difficult.
First, there needs to be more standardization in Scope 3 emissions reporting methods. Companies may use varying methodologies and metrics to calculate and report emissions, making comparing and verifying emissions data challenging. This lack of standardization makes it difficult for businesses to establish and monitor their emission reduction objectives.
Second, it can be challenging to track emissions from indirect sources. It is not easy to accurately measure and attribute emissions to a specific company when they occur in different locations and are managed by different entities. In addition, tracking and measuring emissions from a product or service consumption can be challenging.
Additionally, limited data availability can be problematic. In some instances, data on emissions from indirect sources may be limited, making it challenging for businesses to measure and report their Scope 3 emissions accurately.
In the following section, we will delve deeper into the issues surrounding measuring Scope 3 emissions and the implications for businesses seeking to establish and meet sustainability goals.
How important is it to measure Scope 3 to ensure that businesses meet their sustainability objectives?
Measuring and reporting Scope 3 emissions is essential for businesses seeking to establish and meet sustainability goals. Comprehensive reporting of emissions, including Scope 3 emissions, enables firms to comprehend the full extent of their environmental impact and identify significant sources of emissions.
In addition, businesses must measure and report Scope 3 emissions to set and track their emissions reduction targets. With accurate data on Scope 3 emissions, companies may fully comprehend their emissions profile and take advantage of significant opportunities to reduce emissions.
Ignoring Scope 3 emissions may also have negative repercussions. For instance, companies may fall short of their sustainability objectives or be perceived as not being transparent and fully committed to sustainability.
According to the Greenhouse Gas Protocol, Scope 3 emissions, also known as indirect emissions, significantly contribute to a company’s overall carbon footprint, accounting for 80-90% of total emissions. Due to a lack of standardization in reporting methods, the complexity of tracking emissions from indirect sources, and limited data availability, measuring and reporting Scope 3 emissions can be difficult. Despite these obstacles, measuring and reporting Scope 3 emissions is essential for businesses seeking to establish and achieve sustainability goals, identify significant sources of emissions, and avoid potential consequences associated with ignoring these emissions. Companies must consider and address Scope 3 emissions as part of their sustainability efforts.